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ⓘ Comply or explain is a regulatory approach used in the United Kingdom, Germany, the Netherlands and other countries in the field of corporate governance and fin ..




Comply or explain
                                     

ⓘ Comply or explain

Comply or explain is a regulatory approach used in the United Kingdom, Germany, the Netherlands and other countries in the field of corporate governance and financial supervision. Rather than setting out binding laws, government regulators set out a code, which listed companies may either comply with, or if they do not comply, explain publicly why they do not. The UK Corporate Governance Code, the German Corporate Governance Code and the Dutch Corporate Governance Code Tabaksblat use this approach in setting minimum standards for companies in their audit committees, remuneration committees and recommendations for how good companies should divide authority on their boards.

The purpose of "comply or explain" is to "let the market decide" whether a set of standards is appropriate for individual companies. Since a company may deviate from the standard, this approach rejects the view that "one size fits all", but because of the requirement of disclosure of explanations to market investors, anticipates that if investors do not accept a companys explanations, then investors will sell their shares, hence creating a "market sanction", rather than a legal one. The concept was first introduced after the recommendations of the Cadbury Report of 1992.

                                     
  • such reason is to allow private transactors the choice to comply with anti - money laundering or tax regulations. Transactions are auditable but disclosure
  • agenda, corrigenda An addendum may explain inconsistencies or expand the existing work or otherwise explain or update the information found in the main
  • online and in pdf format, under which there is an obligation to comply with the Combined Code, or explain why it is not complied with, under LR 9.8.6 6
  • explain how certain individuals can make another comply and why someone else succumbs to compliance. In complying with the requests of others and or by
  • originally based. Tier 3 countries are countries whose governments do not fully comply with the minimum standards and are not making significant efforts to do
  • Financial Review. Companies must either comply with this provision or explain why they will not. If they do comply public companies must state the main
  • rational firms will comply to the standards only in case the expected fine is higher than the cost of compliance. In order to explain the paradox several
  • that she or he was duly warned - the contents of the warning may have to be explained - and that there was a non - appearance or other failure to comply with the
  • kicks in. Naturally, there are other reasons why individuals do or do not comply with the law Bottoms, 2001 According to Lawrence Solum, since legitimacy
  • sufficient particularization to allow for a meaningful investigation. Failure to comply with the two requirements will result in the court making an adverse inference
  • jurisdictions using common law. An allocution allows the defendant to explain why the sentence should be lenient. In plea bargains, an allocution may
  • hazardous chemicals. Any facility that stores or uses a defined highly hazardous chemical must comply with OSHA s process safety management PSM regulations

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